Origin enjoys the cooler weather

Higher oil prices and cool weather helped push Origin Energy's first-half profit up by 40 per cent, but the company warned yesterday that the fire at the Moomba gas plant in South Australia's far north-east would dent second-half earnings.

Origin reported yesterday that profit after tax for the six months to December 31 was $125.6 million. Revenue for the period was up 11 per cent to $1.85 billion.

The company will pay an interim fully franked dividend of 6¢ a share, payable on March 18 to shareholders on the books at February 26. Earnings per share rose by 39 per cent to 19.2¢.

Origin Energy shares closed up 9¢ yesterday at $5.40.

Origin shares will trade ex dividend from tomorrow. The dividend reinvestment plan will apply for this dividend, and a discount of 2.5 per cent will apply.

The strong first-half result was helped by several factors, including a big rise in oil production in the onshore Perth Basin, and higher oil prices; and cooler weather in the Victorian and South Australian markets, which boosted sales in the retail gas business. Also, an additional capacity payment from the Mt Stuart power station, added $7 million to pretax profit.

Managing director Grant King said these one-off factors would not be repeated in the second half, which would be affected by the Moomba gas plant fire.

Origin has a 13.2 per cent interest in the plant, operated by Santos. Mr King said the fire would cut after-tax profit this year by $6-$7 million.

Other factors affecting the result are Origin's $55.6 million equity contribution to the SEA gas pipeline between Victoria and SA, and a $NZ33 million ($A29 million) cash consideration for a half interest in the Kupe gas field off New Zealand.

Mr King said, however, that despite these factors, earnings per share for the full year would be about 20 per cent higher than last year.

Net debt to equity fell slightly to 40 per cent, while free cash flow - the money available for funding growth and distributions to shareholders - rose 20 per cent to $230 million.

Mr King said several projects would boost future earnings. The $450 million BassGas project, which is near completion, will start delivering gas into Victoria in the September quarter of this year. The offshore Otway project is expected to start development in the June quarter and be delivering gas to Victoria and SA from early 2006.

The company has signed coal seam gas contracts over 15 years with Australian Gas Light Company and QAL.